ConAgra Foods, Inc. (CAG - Analyst Report) is scheduled to report fourth-quarter fiscal 2015 results before the opening bell on Jun 30, 2015. Over the last four trailing quarters, the company generated a positive average earnings surprise of 4.8%, missing the estimate only once. Let’s see how things are shaping up prior to this announcement.

Factors to Influence Q4 Results

ConAgra is trying to improve its performance on the back of tactical market penetration and development strategies. Aided by the acquired Lamb Weston potato business, the company attempts to enhance revenues of its Commercial segment. Moreover, the segment’s margin continues to improve with the help of strategic cost-saving programs. Also, settlement of the West Coast port labor dispute toward the end of third-quarter fiscal 2015 would help widen the segmental margin in the to-be-reported quarter.

However, weak volume and price/mix were responsible for lowering the sales of ConAgra’s Consumer Foods segment in third-quarter fiscal 2015. These issues, coupled with a strong U.S. dollar, might further hurt the segments’ top-line figures in fourth-quarter fiscal 2015.

At the same time, higher durum wheat and snack nuts prices are anticipated to lower the margins of the company’s Private Brands segment in the fourth quarter. Also, weakening demand for cereal, snacks, in-store bakery, pasta and condiments are likely to adversely affect the revenues of Private Brands and Consumer Foods segments in the quarter under review. The company projects earnings in the range of $2.15–$2.19 per share for full-year fiscal 2015. We also expect the company will successfully lower its debt burden by $1 billion at the end of fiscal 2015.

Earnings Whispers

Our proven model does not conclusively state that ConAgra Foods is likely to beat earnings in the quarter under review. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for an earnings beat. That is not the case here as we will see below.
    
Zacks ESP: ConAgra Foods has an Earnings ESP of -5.09% for the quarter, as the Most Accurate estimate of 56 cents stands below the Zacks Consensus Estimate of 59 cents.
    
Zacks Rank: ConAgra Foods’ Zacks Rank #3 (Hold) increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.

We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Skechers USA Inc. (SKX - Analyst Report), with an Earnings ESP of +5.32% and a Zacks Rank #2.

Hanesbrands Inc. (HBI - Analyst Report), with an Earnings ESP of +6.00% and a Zacks Rank #2.

Caleres, Inc. (CAL - Snapshot Report), with an Earnings ESP of +2.22% and a Zacks Rank #2.